Employees are viewed as the valued asset of the organization. It is, therefore, important to attract, motivate and retain them to work for the achievement of the organisational goals.
a. What is reward in employee compensation? Discuss the two types of employee compensation.
Assignment Help Answers with Step-by-Step Explanation:
Reward in employee compensation refers to the financial and non-financial benefits that employees receive in return for their work and contributions to the organization. These rewards are designed to attract, motivate, and retain employees and are an essential part of overall compensation packages. There are two main types of employee compensation:
Direct Compensation: This includes the monetary rewards that employees receive directly for their work. It comprises the base salary or wages, bonuses, commissions, and any other cash incentives tied to performance. For example, if a salesperson receives a monthly salary plus a commission for each sale made, the commission is part of their direct compensation.
Retention: To retain valuable employees, reward management must provide incentives that make employees want to stay with the company long-term. This can involve not only competitive salaries but also opportunities for career development and advancement.
Motivation: Effective reward management should motivate employees to perform at their best. This can be achieved through performance-based bonuses, recognition programs, and other incentives that encourage employees to excel in their roles.
d. Incentive as a Motivational Effort:
The statement "incentive is a motivational effort" means that providing incentives, both financial and non-financial, can motivate employees to perform better and achieve organizational goals. Here are some examples:
Incentives can vary widely but are generally designed to reward and motivate employees, ultimately benefiting the organization by enhancing employee performance and commitment.